2023 Second Quarter Net Sales of $19.9 Million,
up 58% on a Year-Over-Year Basis
Casino and Gaming Sales of $12.2 Million, up
87% on a Year-Over-Year Basis
FST Sales of $3.9 Million, up 14% on a
Year-Over-Year Basis
TransAct Technologies Incorporated (Nasdaq: TACT) (“TransAct” or
the “Company”), a global leader in software-driven technology and
printing solutions for high-growth markets, today reported
preliminary results for the second quarter ended June 30, 2023.
“Our team continues to capitalize on opportunities in our core
markets as they present themselves, and while the competitive
environment in casino and gaming has started to normalize as
predicted, we believe that we will see a sustainable, net market
share gain in the long run,” said John Dillon, Chief Executive
Officer of TransAct. “We have also been hard at work with our now
restructured food service technology (“FST”) sales team, and are
beginning to actively market and demonstrate our new BOHA! Terminal
2 to existing and potential customers. While these are multi-stage
sales opportunities with lengthy cycle times, we are encouraged by
our early results and pre-orders, and believe a solid foundation
has been laid for future growth.”
Second Quarter 2023 Financial Highlights
- Net Sales: Net sales for the second quarter of 2023 were
$19.9 million, up 58% compared to $12.6 million for the second
quarter of 2022.
- FST Recurring Revenue: FST recurring revenue for the
second quarter of 2023 was $2.5 million, up 14% compared to $2.2
million for the second quarter of 2022.
- Gross Profit: Gross profit for the second quarter of
2023 was $10.9 million, resulting in gross margin of 54.5%,
compared to gross profit of $5.4 million for the second quarter of
2022, which delivered a 43.0% gross margin.
- Operating income (loss): Operating income for the second
quarter of 2023 was $1.2 million, compared to operating loss of
$(3.0) million for the second quarter of 2022.
- Net income (loss): Net income for the second quarter of
2023 was $765 thousand, or $0.08 net income per diluted share,
based on 10.0 million weighted average common shares outstanding.
Net loss for the comparable 2022 period was $(2.4) million, or
$(0.24) net loss per diluted share, based on 9.9 million weighted
average common shares outstanding.
- Adjusted net income (loss): Adjusted net income for the
second quarter of 2023 was $2.2 million, or $0.22 net income per
diluted share. Adjusted net loss for the comparable 2022 period was
$(2.4) million, or $(0.24) net loss per diluted share.
- EBITDA: EBITDA was $1.6 million for the second quarter
of 2023, compared to EBITDA loss of $(2.8) million for the second
quarter of 2022.
- Adjusted EBITDA: Adjusted EBITDA was $3.2 million for
the second quarter of 2023, compared to adjusted EBITDA loss of
$(2.5) million for the second quarter of 2022.
2023 Financial Outlook
- Total Net Sales: The Company currently expects total net
sales of between $71.5-73.5 million.
- Total Adjusted EBITDA: The Company currently expects
total adjusted EBITDA of between $8.0 -$8.5 million.
Our outlook for non-GAAP adjusted EBITDA is presented only on a
non-GAAP basis because not all of the information necessary for a
quantitative reconciliation of this forward-looking non-GAAP
financial measure to the most directly comparable GAAP financial
measure is available without unreasonable effort, primarily due to
uncertainties relating to the occurrence or amount of these
adjustments that may arise in the future. If one or more of the
currently unavailable items is applicable, some items could be
material, individually or in the aggregate, to GAAP reported
results.
2023 Second Quarter Conference Call and Webcast
TransAct is hosting a conference call and webcast today, August
9, 2023, beginning at 4:30 p.m. ET to discuss the Company’s
preliminary second quarter 2023 results and other matters. Both the
call and the webcast are open to the general public. The conference
call number is 888-886-7786 and the conference ID number is
45546995 (domestic or international). Please call ten minutes prior
to the presentation to ensure that you are connected.
Interested parties may also access the conference call live on
the Internet at www.transact-tech.com (select “Investor Relations”
followed by “Events & Presentations”). Approximately two hours
after the call has concluded, an archived version of the webcast
will be available for replay at the same location.
Non-GAAP Financial Measures
TransAct is providing certain non-GAAP financial measures
because the Company believes that these measures are helpful to
investors and others in assessing the ongoing nature of what the
Company’s management views as TransAct’s core operations. EBITDA
and adjusted EBITDA provide the Company with an understanding of
one aspect of earnings before the impact of investing and financing
charges and income taxes. The Company believes that these non-GAAP
financial measures provide relevant and useful information to an
investor evaluating the Company’s operating performance because
these measures are: (i) widely used by investors to measure a
company’s operating performance without regard to items that do not
reflect the Company’s ongoing operations and are excluded from the
calculation of such measure; (ii) used as financial measurements by
lenders and other parties to evaluate creditworthiness; and (iii)
used by the Company’s management for various purposes including
strategic planning and forecasting and assessing financial
performance. Adjusted net income (loss) and adjusted net income
(loss) per diluted share provide the Company with an understanding
of the results of the primary operations of the business by
excluding the effects of special items (for example, the $1.5
million severance charge related to the resignation of the
Company’s former CEO) that do not reflect the ordinary earnings of
the Company’s operations. The Company uses these measures to
evaluate period-over-period operating performance because the
Company believes this provides a more comparable measure of the
Company’s continuing business, as these measures adjust for the
special items that are not reflective of the normal results of the
business. The presentation of this non-GAAP information is not
considered superior to or a substitute for, and should be read in
conjunction with, the financial information prepared in accordance
with GAAP.
EBITDA is defined as net income (loss) before net interest
expense, income taxes, depreciation, and amortization. A
reconciliation of EBITDA to net income (loss), the most comparable
GAAP financial measure, can be found attached to this release.
Adjusted EBITDA is defined as net income (loss) before net
interest expense, income taxes, depreciation and amortization and
is adjusted for (1) share-based compensation and (2) the $1.5
million severance charge related to the resignation of the
Company’s former CEO. The Company adjusts EBITDA for share-based
compensation because the Company considers share-based compensation
to be a non-cash expense similar to depreciation and amortization.
The Company also adjustes for the severance charge related to the
resignation of the Company’s former CEO because the Company
believes this charge does not reflect the ordinary earnings of the
Company’s operations. A reconciliation of adjusted EBITDA to net
income (loss), the most comparable GAAP financial measure, can be
found attached to this release.
Adjusted net income (loss) is defined as net income (loss)
adjusted for the $1.5 million severance charge related to the
resignation of the Company’s former CEO. A reconciliation of
adjusted net income (loss) to net income (loss), the most
comparable GAAP financial measure, can be found attached to this
release.
Adjusted net income (loss) per diluted share is defined as
adjusted net income (loss) divided by diluted shares outstanding. A
reconciliation of adjusted net income (loss) per diluted share to
net income (loss) per diluted share, the most comparable GAAP
financial measure, can be found attached to this release.
About TransAct Technologies Incorporated
TransAct Technologies Incorporated is a global leader in
developing and selling software-driven technology and printing
solutions for high-growth markets including food service, casino
and gaming, and POS automation. The Company’s solutions are
designed from the ground up based on customer requirements and are
sold under the BOHA!™, AccuDate™, EPICENTRAL®, Epic and Ithaca®
brands. TransAct has sold over 3.7 million printers, terminals and
other hardware devices around the world and is committed to
providing world-class service, spare parts, and accessories to
support its installed product base. Through the TransAct Services
Group, the Company also provides customers with a complete range of
supplies and consumable items both online at
http://www.transactsupplies.com and through its direct sales team.
TransAct is headquartered in Hamden, CT. For more information,
please visit http://www.transact-tech.com or call (203)
859-6800.
©2023 TRANSACT Technologies Incorporated. All rights reserved.
TransAct®, BOHA!™, AccuDate, Epic Edge®, EPICENTRAL®, Ithaca®
areTrademarks of TransAct Technologies Incorporated.
Cautionary Statement Regarding Preliminary Financial
Information
The Company has prepared the preliminary financial information
set forth below on a materially consistent basis with its
historical financial information and in good faith based upon its
internal reporting as of and for the three and six months ended
June 30, 2023. This financial information is preliminary and is
thus inherently uncertain and subject to change as the Company
finalizes its financial results and related review for the three
and six months ended June 30, 2023. During the course of the
preparation of the Company’s condensed consolidated financial
statements and related notes as of and for the three and six months
ended June 30, 2023, the Company may identify items that could
cause its final reported results to be materially different from
the preliminary financial information set forth above. As a result,
there can be no assurance that the Company’s final results for this
period will not differ from the preliminary financial
information.
This preliminary financial information should not be viewed as a
substitute for full financial statements prepared in accordance
with GAAP. In addition, this preliminary financial information is
not necessarily indicative of the results to be achieved for any
future period.
Forward-Looking Statements
Certain statements included in this press release may be
forward-looking statements. Forward-looking statements are any
statements other than statements of historical fact.
Forward-looking statements represent current views about possible
future events and are often identified by the use of
forward-looking terminology, such as "may", "will", "expect",
"intend", "estimate", "anticipate", "believe", "project”, "plan”,
"design" or "continue", or the negative thereof, or other similar
words. Forward-looking statements are subject to certain risks,
uncertainties and assumptions. In the event that one or more of
such risks or uncertainties materialize, or one or more underlying
assumptions prove incorrect, actual results may differ materially
from those expressed or implied by the forward-looking statements.
Important factors and uncertainties that could cause actual results
to differ materially from those expressed or implied by the
forward-looking statements include, but are not limited to, the
following: the adverse effects of current economic conditions,
whether due to the COVID-19 pandemic or otherwise, on our business,
operations, financial condition, results of operations and capital
resources, difficulties or delays in manufacturing or delivery of
inventory or other supply chain disruptions, inflation and the
Russia/Ukraine conflict, an inability of our customers to make
payments on time or at all, diversion of management attention, a
possible future reduction in the value of goodwill or other
intangible assets, inadequate manufacturing capacity or a shortfall
or excess of inventory as a result of difficulty in predicting
manufacturing requirements due to volatile economic conditions,
price increases or decreased availability of component parts or raw
materials, exchange rate fluctuations, volatility of and decreases
in trading prices of our common stock and the availability of
needed financing on acceptable terms or at all; our ability to
successfully develop new products that garner customer acceptance
and generate sales, both domestically and internationally, in the
face of substantial competition; our reliance on an unrelated third
party to develop, maintain and host certain web-based food service
application software and develop and maintain selected components
of our downloadable software applications pursuant to a
non-exclusive license agreement, and the risk that interruptions in
our relationship with that third party could materially impair our
ability to provide services to our food service technology
customers on a timely basis or at all and could require substantial
expenditures to find or develop alternative software products; our
ability to successfully transition our business into the food
service technology market; risks associated with potential future
acquisitions; general economic conditions; our dependence on
contract manufacturers for the assembly of a large portion of our
products in Asia; our dependence on significant suppliers; our
ability to recruit and retain quality employees as the Company
grows; our dependence on third parties for sales outside the United
States; our dependence on technology licenses from third parties;
marketplace acceptance of new products; risks associated with
foreign operations; the availability of third-party components at
reasonable prices; price wars, supply chain disruptions or other
significant pricing pressures affecting the Company’s products in
the United States or abroad; increased product costs or reduced
customer demand for our products due to changes in U.S. policy that
may result in trade wars or tariffs; our ability to protect
intellectual property; and other risk factors detailed in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2022, and other reports filed with the Securities and Exchange
Commission. Actual results may differ materially from those
discussed in, or implied by, the forward-looking statements. We
caution readers not to place undue reliance on forward-looking
statements, which speak only as of the date of this release. We
undertake no obligation to publicly or otherwise revise any
forward-looking statements, whether as a result of new information,
future events or other factors, except where we are expressly
required to do so by applicable law.
- Financial tables follow-
TRANSACT TECHNOLOGIES
INCORPORATED
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Preliminary and
Unaudited)
Three months ended
Six months ended
June 30,
June 30,
2023
2022
2023
2022
(In thousands, except per share
data)
Net sales
$19,906
$12,623
$42,176
$22,325
Cost of sales
9,048
7,189
19,063
14,325
Gross profit
10,858
5,434
23,113
8,000
Operating expenses:
Engineering, design and product
development
2,505
2,172
4,774
4,455
Selling and marketing
2,684
3,293
5,441
5,976
General and administrative
4,445
2,923
7,861
6,127
9,634
8,388
18,076
16,558
Operating income (loss)
1,224
(2,954)
5,037
(8,558)
Interest and other income (expense):
Interest, net
(68)
(28)
(134)
(92)
Other, net
-
(264)
21
(299)
(68)
(292)
(113)
(391)
Income (loss) before income taxes
1,156
(3,246)
4,924
(8,949)
Income tax (expense) benefit
(391)
870
(1,020)
2,225
Net income (loss)
$765
$(2,376)
$3,904
$(6,724)
Net income (loss) per common share:
Basic
$0.08
$(0.24)
$0.39
$(0.68)
Diluted
$0.08
$(0.24)
$0.39
$(0.68)
Shares used in per share calculation:
Basic
9,956
9,910
9,943
9,898
Diluted
10,017
9,910
10,016
9,898
SUPPLEMENTAL INFORMATION –
SALES BY MARKET:
(Preliminary and
Unaudited)
Three months ended
Six months ended
June 30,
June 30,
2023
2022
2023
2022
(In thousands)
Food service technology
$3,895
$3,432
$7,353
$5,562
POS automation
1,904
1,172
3,701
2,472
Casino and gaming
12,172
6,525
27,983
11,287
TransAct Services Group
1,935
1,494
3,139
3,004
Total net sales
$19,906
$12,623
$42,176
$22,325
TRANSACT TECHNOLOGIES
INCORPORATED
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Preliminary and
Unaudited)
June 30,
December 31,
2023
2022
(In thousands)
Assets:
Current assets:
Cash and cash equivalents
$10,756
$7,946
Accounts receivable, net
14,441
13,927
Employee retention credit receivable
-
1,500
Inventories
15,408
12,028
Other current assets
707
724
Total current assets
41,312
36,125
Fixed assets, net
2,838
2,781
Right-of-use asset, net
2,053
2,488
Goodwill
2,621
2,621
Deferred tax assets
6,565
7,327
Intangible assets, net
165
242
Other assets
333
248
14,575
15,707
Total assets
$55,887
$51,832
Liabilities and Shareholders’
Equity:
Current liabilities:
Current portion of revolving loan
payable
$2,250
$2,250
Accounts payable
6,321
7,395
Accrued liabilities
5,511
4,077
Lease liability
904
875
Deferred revenue
1,222
1,329
Total current liabilities
16,208
15,926
Deferred revenue, net of current
portion
152
143
Lease liability, net of current
portion
1,210
1,683
Other liabilities
227
218
1,589
2,044
Total liabilities
17,797
17,970
Shareholders’ equity:
Common stock
140
139
Additional paid-in capital
56,594
56,282
Retained earnings
13,534
9,630
Accumulated other comprehensive loss, net
of tax
(68)
(79)
Treasury stock, at cost
(32,110)
(32,110)
Total shareholders’ equity
38,090
33,862
Total liabilities and shareholders’
equity
$55,887
$51,832
TRANSACT TECHNOLOGIES
INCORPORATED
RECONCILIATION OF GAAP
EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL
MEASURES
(Preliminary and Unaudited, in
thousands of dollars, except percentages and per share
data)
Three months ended
June 30, 2023
Reported
Adjustments(1)
Adjusted Non-GAAP
Operating expenses
$9,634
$(1,461)
$8,173
% of net sales
48.4%
41.1%
Operating income
1,224
1,461
2,685
% of net sales
6.1%
13.5%
Interest and other expense
(68)
-
(68)
Income before income taxes
1,156
1,461
2,617
Income tax expense
(391)
(70)
(461)
Net income
765
1,391
2,156
Net income per common share:
Basic
$0.08
$0.14
$0.22
Diluted
$0.08
$0.14
$0.22
(1)
Adjustment includes a severance charge of $1,461 incurred in
April 2023 related to the resignation of the Company’s former
CEO.
Three months ended June 30,
2022
Reported
Adjustments(2)
Adjusted Non-GAAP
Operating expenses
$8,388
$-
$8,388
% of net sales
66.5%
66.5%
Operating loss
(2,954)
-
(2,954)
% of net sales
(23.4)%
(23.4)%
Interest and other expense
(292)
-
(292)
Loss before income taxes
(3,246)
-
(3,246)
Income tax benefit
870
-
870
Net loss
(2,376)
-
(2,376)
Net loss per common share:
Basic
$(0.24)
$-
$(0.24)
Diluted
$(0.24)
$-
$(0.24)
(2)
No adjustments.
TRANSACT TECHNOLOGIES
INCORPORATED
RECONCILIATION OF GAAP
EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL
MEASURES
(Preliminary and Unaudited, in
thousands of dollars, except percentages and per share
data)
Six months ended June 30,
2023
Reported
Adjustments(3)
Adjusted
Non-GAAP
Operating expenses
$18,076
$(1,461)
$16,615
% of net sales
42.9%
39.4%
Operating income
5,037
1,461
6,498
% of net sales
11.9%
15.4%
Interest and other expense
(113)
-
(113)
Income before income taxes
4,924
1,461
6,385
Income tax expense
(1,020)
(70)
(1,090)
Net income
3,904
1,391
5,295
Net income per common share:
Basic
$0.39
$0.14
$0.53
Diluted
$0.39
$0.14
$0.53
(3)
Adjustment includes a severance charge of $1,461 incurred in
April 2023 related to the resignation of the Company’s former
CEO.
Six months ended June 30,
2022
Reported
Adjustments(4)
Adjusted Non-GAAP
Operating expenses
$16,558
$-
$16,558
% of net sales
74.2%
74.2%
Operating loss
(8,558)
-
(8,558)
% of net sales
(38.3)%
(38.3)%
Interest and other expense
(391)
-
(391)
Loss before income taxes
(8,949)
-
(8,949)
Income tax benefit
2,225
-
2,225
Net loss
(6,724)
-
(6,724)
Net loss per common share:
Basic
$(0.68)
$-
$(0.68)
Diluted
$(0.68)
$-
$(0.68)
(4)
No adjustments.
TRANSACT TECHNOLOGIES
INCORPORATED
RECONCILIATION OF NET INCOME
(LOSS) TO EBITDA AND ADJUSTED EBITDA
NON-GAAP FINANCIAL
MEASURES
(Preliminary and
Unaudited)
Three months ended
Six months ended
June 30,
June 30,
2023
2022
2023
2022
(In thousands)
Net income (loss)
$765
$(2,376)
$3,904
$(6,724)
Interest expense, net
68
28
134
92
Income tax expense (benefit)
391
(870)
1,020
(2,225)
Depreciation and amortization
370
397
722
625
EBITDA
1,594
(2,821)
5,780
(8,232)
Share-based compensation expense
120
285
398
581
Severance charge related to resignation of
the Company’s former CEO
1,461
-
1,461
-
Adjusted EBITDA
$3,175
$(2,536)
$7,639
$(7,651)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230809679218/en/
Investor Contact: Ryan Gardella ICR, Inc.
Ryan.Gardella@icrinc.com
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